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Endo Health to Shell Out $54.5 million
In a filing with the US Securities and Exchange Commission (SEC),
Endo Health Solutions Inc. ( ENDP - Analyst Report) disclosed that it will pay $54.5 million to settle some lawsuits against its American Medical Systems segment (formerly devices). Through the lawsuits, allegations of personal injury from the use of Endo Health’s transvaginal surgical mesh products have been made. The products are used for treating pelvic organ prolapse and stress urinary incontinence.
Endo Health stated that it will make the payment into a settlement fund held in escrow on or before Jul 15, 2013. Endo Health has the option to terminate the settlement agreement if it does not obtain full releases from atleast 95% of the claimants covered under the deal by Oct 12, 2013. In such an eventuality, the escrowed amount of $54.5 million will be refunded to the company.
Endo Health stated further that the fact that it has reached a settlement agreement does not point to an admission of liability or fault on its part. Endo Health intends to continue to defend itself in the remainder of the similar cases against it. The company will also defend itself in any new cases involving the products.
We note that the offerings of the AMS segment became a part of Endo Health following its acquisition of American Medical Systems in 2011. The segment has performed disappointingly over the last few quarters. The company believes that the performance of the segment will improve going forward.
Endo Health is currently exploring options regarding its other struggling division- HealthTronics (services). The company said that it intends to work on driving growth at its other three segments- Qualitest, Branded Pharmaceuticals and AMS.
Endo Health currently carries a Zacks Rank #3 (Hold). However, companies such as Jazz Pharmaceuticals ( JAZZ - Analyst Report) , Santarus, Inc. and Salix Pharmaceuticals appear to be more attractive with a Zacks Rank #1 (Strong Buy).